Titans of industry: Unox

Unox has had huge success with its disruptive products. Enrico Franzolin, his daughter Chiara Franzolin and son-in-law Nicola Michelon talk to Michael Jones about keeping it simple

Considering its place in an industry that celebrates the colour and vibrancy of food, the Unox logo is, significantly, black and white. Simple, effective, striking. Unox is forged upon the principle of finding simple solutions to complex problems. This belief has guided president Enrico Franzolin since he bought 50% of Unox, then a fledgling convection oven business, in 1991, becoming sole owner in 2005.

So wedded is Franzolin to the problem-solving philosophy of ‘inventive simplification’ he literally wrote the book about the concept. “In essence inventive simplification is about innovating through simplifying your solutions,” he wrote in 25 Recipes of Inventive Simplification in 2015. “It’s about continuously boosting your product’s value, while cutting costs. It’s about getting things done easier, faster and more efficiently. It’s about inventing products, services and experiences that customers can easily understand, embrace and benefit from.”

Franzolin grew up in post-war Northern Italy where the farmhouse he shared with 11 other members of his family had no electricity or running hot water. Within minutes of meeting him his strong sense of family and an entrepreneurial zeal, borne out of having to create his own toys and money-making schemes as a young boy, is evident.

A chemical engineer by trade, Franzolin had already shown a flair for inventing patents at Italian energy giant Montedison before deciding to fulfil his ambition to become an entrepreneur and joining the tiny Padua-based oven manufacturer, Unox.

His desire to build Unox “from scratch” came from wanting to create a business “a little bit different from other companies only looking for money”. He also wanted to work with “passionate” people.

It would be hard to find more impassioned advocates of Franzolin’s philosophy than his daughter Chiara Franzolin, director of operations, and her husband Nicola Michelon, CEO of Unox. When I meet all three of them at the Padua headquarters, their enthusiasm for the business and its employees is infectious.

Attention to detail

“We want to be a great place to work,” says Michelon. “We fully understand that we are as good as our people. With our growth rate we need to bring the best talents on board. We are very people oriented. I want a workspace that doesn’t give the impression of an industrial area.”

To that end, a new, 60,000 sq m production factory and offices nearby will open in 2022. And yet, the current facility, which will remain as HQ for the company’s 40+ R&D team, is a model of efficiency. All electricity is generated from solar panels on the roof (with a further 11% given back to the Italian grid) while five layers of treated, reflective glass keep the heat in the buildings.

90% of the components for Unox’s ovens are produced ‘in house’ by sister companies in Padua. These companies were established to provide 80% of their output to Unox and 20% to other, non-competitor, companies. This provides Unox flexibility and control over costs and production resources.

It is a company where attention to detail is paramount and the little things matter. On a tour of the pristine production assembly lines I am told by one of the team that screws used in the construction of the ovens are made with rounded tips so the workers don’t catch their hands on them. Meticulously measured-out lines of coloured tape mark the floor so workers know exactly where to park production trolleys. “We build our products. We don’t just assemble them,” smiles Enrico Franzolin.

Attention to detail makes a difference when you are able to boast the build of an oven in three hours and offer a two-day turnaround on orders (one day to process and build, one day to ship). The Padua factory can produce up to 400 units a day in peak season because of that fast, lean manufacturing process.

No wonder business is booming. The firm now employs 530 people worldwide (including 350 in Italy) and distributes to 120 countries, a result, says Michelon of the board making a conscious decision “to become a global company” in 2008.

“That decision was driven by our aim to provide a customer in the suburbs of Adelaide, Boston or Padua with the same service,” he says. “We moved from being just focused on product and production into a company focused on product and production on one side and customer experience and people on the other. We moved from ‘value for money’ into a ‘performance and return-on-investment’ company from our customers’ perspective.”

Customers now include McDonald’s, Starbucks, Tesco, Costa Cruises, Asda, Sodexo, BP, Shell and Rio Tinto. “We exist as long as our customers are happy,” smiles Chiara Franzolin. The importance placed upon understanding the needs of its customers is illustrated in Unox ensuring all new team members spend their first five days in the job (15 for sales staff) meeting customers. All staff receive three weeks training in Padua to ensure the importance of the customer experience is reinforced.

“Seeing and understanding who our customers are is so relevant. We ask ourselves: ‘Who is our customer and how can we generate value for them? How can we make a difference?’ You have to understand who your customer is and what their needs are,” she says.

Business lessons are learnt quickly at Unox, it appears. “Starting a business is not easy in the beginning. The real lesson I learnt was to give people around me the opportunity to grow and develop. Don’t take all the responsibility,” says Enrico Franzolin.

Michelon agrees. “You have to learn how to do something, then find someone better than you at it. Delegate to the right person. We provide employees with the tools to be successful. We hire the person, not the experience. We are challengers and I don’t think anybody around us is as hungry as we are, so I struggle to hire from the industry.”

Tapping into the talent from the nearby Padua University, one of the biggest in Italy, has been another smart move, with a strong effort made to show students they are an attractive local employer of choice. “We received 1,000 visitors last year plus another 1,500 students from Padua University and local high schools,” says Chiara Franzolin.

New markets

With a legacy already assured, Enrico remains “100% involved” in the day-to-day business life of Unox, according to Michelon. “He is strongly involved in product innovation and most of the long and mid-term decisions we take as the board of directors. Enrico is driven by innovation. Me? I’m an engineer driven towards being a businessman.”

Hugely engaging with a restless energy, Michelon, became CEO in 2012. Having graduated as a manufacturing engineer from Padua University he joined the company 10 years ago to expand its sales network. “One way to describe the three of us is that we are always unsatisfied with what we have achieved,” he says. “That’s what makes the difference. Enrico is 62 and he’s never stopped being like that. Since I was five I have been like that. I graduated a year early and I still was saying, ‘I could have done it six months earlier’.”

Michelon’s desire for the company to be better at everything it does is self-evident. “We grew 23% last year and we are going to grow 25% this year. There is so much of an uncapped market for us. I think it would be reasonable to triple the size of the company without the need of mergers and acquisitions. So long as the only product generating our success is ovens, we can only make the best ovens in the world. We don’t have another choice,” he says.

“Our definition of manageable growth is based on being able to sustain this without jeopardising our customer experience. We cannot afford to sell one more product but create an unhappy customer. ”

So what makes Unox special? “We make products that generate the highest ROI for customers” says Chiara. “We believe in building success for the people who work for us. Customers and partners feel this.”

And product innovation is at the core of that. “We see innovation as the key to sustaining competitiveness because it’s with innovation that you can create more value for your customer,” says Michelon. “If you keep doing the same thing as 20 years ago, you are doomed. Everything that is happening right now with the internet of things and with artificial intelligence is going to disrupt any company not investing heavily in innovation. This exponential technology coming into everyday life requires companies to focus on product innovation. You either take the wave and ride it or you sink.”

Added value

Innovation at Unox is just as likely to be found in the operations team as it is in the products themselves. “We have three main operation teams: order management, production team and shipping team,” says Chiara. “The operations process starts when an order comes in. The production department has to manage the guarantee of all materials through to the shipping department and the warehouse, so one person takes charge of the entire order process. We support all our partners and distributors throughout the process. Most of our suppliers are within 100km radius of us here in Padua, so having that vertical integration guarantees us short lead times.”

Delivering on those short lead times is clearly another value add for Unox’s growing global customer base around the world. And Michelon sees opportunity to grow that base globally, citing the rise of services such as UberEATS and Deliveroo as increasingly pivotal. “We work with anthropologists and study people’s behaviour,” he says. “People are going to eat food that has not been cooked in their home more and more. Houses in Shanghai are being built without kitchens because food can be delivered to your door in 10-20 minutes. You can buy your lunch on an app for your entire life and still have saved versus building a kitchen. We shouldn’t pretend any market is saturated. This year it’s about growing in every market segment.”

Unox, Michelon believes, must keep “a very intimate relationship” with the kind of customers that are driving change. “You need to understand and watch them from different perspectives. It’s not just about products and metrics. It’s about anthropology. Society is going to impact this business, so you must try to understand it and provide something that other companies have not seen coming. Disruption is the key to innovation. Incremental innovation improves things, but it’s when you disrupt that you make changes. 20 years ago Unox was able, through inventive simplification, to provide a combi-steamer costing 70% less than existing combi-steamers. It disrupted and opened a market that did not exist 20 years ago.”

When I ask Enrico Franzolin if he is worried about the company growing too large and losing its agility, his eyes twinkle. “I’m more worried about remaining too small,” he laughs. “To be bigger means there’s a lot of chances to be better.”

While not dismissing the option of future M&A, for now, the team prefer to focus on organic growth. “The main growth for Unox is from inside. It’s difficult to find the same culture in another company,” says Enrico. “When you acquire another company you have to change their culture. That takes time.”

Competition, of course, remains a constant for Unox. Yet rather than seeing a threat to the business from established global manufacturers or even smaller companies from emerging markets, Enrico remains focused on non-industry players. “The biggest competition in my opinion is something coming from Silicon Valley that completely disrupts the world. I’m not concerned about the competition I see on the market today, because we can control and understand them.”

Spending time with Franzolin, his daughter and son-in-law, it’s clear that, while they have their respective fingers on the pulse and a huge desire to keep growing Unox, none of them want to lose sight of what makes them happiest. “I believe if you have a passion you have to fulfil it,” says Michelon. “My real passion is to see people around me become successful, but our young family is a big thing for me. I have worked [solidly] since 2003 but in the last couple of years I’ve tried to give more time to my family. My daughters deserve that.”

“We have two babies,” says Chiara. “When I’m with them I can’t think of anything else. They make me completely relaxed. Family is really important for me.”

And while that is clearly also true for Enrico Franzolin, he evidently found a successful work/life balance many years ago. “Innovation is my passion. I won’t lose it,” he laughs. It’s a black and white approach to business and life that is serving him, his family and Unox rather well.

Michael Jones